Policy Change Unlikely for Bank of Japan

The Bank of Japan will probably keep policy unchanged at a two-day board meeting starting Tuesday and pledge to keep flooding the money market with trillions of yen, analysts said.

Nine of 13 economists, strategists and currency traders polled by Bloomberg News expect central bank governor Masaru Hayami and his eight policy board colleagues to stand pat at this year’s final board meeting.

Reports released this month show the world’s No. 2 economy slipped into recession for the third time in a decade in the July-September quarter and the confidence of Japanese business managers fell to a three-year low. Still, the bank needs more discussions before adopting new money-market operation strategies, analysts said.

Some investors speculate the central bank may start buying foreign bonds, commercial paper and corporate bonds from banks and brokerage companies soon as a new way to pump more cash into the banking system.

Bloomberg News